Mr. Nasiruddin concluded his presentation by identifying the need for organisations to (1) invest in the right technology, especially to track negative public perception online before it turns into a crisis, (2) retain the right talent necessary for managing both risk and crises, and (3) be proactive in establishing the right corporate culture; with an effective strategy in
place, organisations have the opportunity to enhance their reputation instead of merely engaging in crisis prevention. The effort to curb/ minimize reputational risk calls for the highest duty of care from all responsible persons in the organisation and every stakeholder.
During discussion and Q&A, concerns were raised by several participants regarding the quantification of reputational risk when communicating with the Board, who are often concerned about the financial bottomline. The room came to the conclusion that as a type of risk that is somewhat intangible and difficult to articulate, there should be a “zero tolerance” policy when it comes to reputational risk. That is, measuring reputational risk is not necessary; organisations simply have to anticipate it, and implement the processes and policies that will prevent reputational damage or minimise the costs in the event of a crisis.
Other Key Takeaways
• The risk management process should not only rely on data and analytics. 87% of risk is non-financial, and risk management should investigate and address any factors that could potentially obstruct the achievement of organisational objectives – even if the initial evidence is anecdotal.
• In relation to managing reputational risk, participants also agreed that having skilled PR management and an adequate BCM framework were vital in the event of a crisis.
An effective ERM programme takes into account that risks, including reputational risk, can be spun into opportunity. All in all, the participants from various industries were highly invested in discussing the topic of reputational risk as they found they faced common challenges in their respective organisations.
The IERP® Monthly Newsletter July 2018 4